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The Value of Flexibility in Power Markets

Stéphane Goutte () and Philippe Vassilopoulos ()

Working Papers from HAL

Abstract: The concept of flexibility is not one you find in standard microeconomics textbooks , yet it already plays a major role in the remuneration of the resources that generate and consume electricity every day and is likely to play an even larger role with the penetration of large intermittent renewable capacities. In this paper we attempt to quantify the net revenues that can be captured by a flexible resource able to react to the short term price variations on the day-ahead and intraday markets in Germany. We find that the difference between day-ahead and intraday revenues for a flexible resource has been increasing (although the profitability has been decreasing on both markets). This difference is more pronounced once 15mn price variations can be captured by a flexible resource. The net revenues from the local 15mn auction (which is held 3 hours after the hourly "coupled" day-ahead auction) are more than eight times higher than the day-ahead hourly auction but

Date: 2019-01-02
New Economics Papers: this item is included in nep-ene, nep-eur and nep-reg
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01968081
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